N.J. bill would let lottery winners maintain privacy up to a year

New Jersey Lottery winners expect instant riches. But along with their money comes the attention, sometimes unwanted, of newfound friends and companies that say they want to help manage all that cash.

Each year, for-profit companies make an average of 70 records requests to the New Jersey Lottery, seeking the names and contact information for lottery winners, according to a review of the document requests by The Record. The lottery is obliged to hand over the information, which is a public record.

The companies say some people find the lump-sum payments or financial advice they offer helpful.

But now, against the backdrop of a record-breaking $425 million Powerball jackpot this week, one assemblyman has raised the question: Should these winners be shielded from the public?

Assemblyman John Burzichelli, D-Gloucester, is sponsoring legislation to let lottery winners stay anonymous for a year after winning.

“A person, if they have the good fortune of winning, should be able to shield themselves for a time,” he said, adding that his bill would help winners “give some thought to what they want to do.”

While Burzichelli sees his bill as a chance to help winners adjust to their new wealth, Walter Luers, an attorney and president of the New Jersey Foundation for Open Government, sees it as a needless expansion of government secrecy.

If New Jersey is going to have a lottery, he said, “they have to make it public so we can see how it’s run.”

Not doing so gives the state government a new way to hide how it spends money, he said. And letting lottery winners stay anonymous, even just for a year, could encourage corruption in the system.

Burzichelli dismissed that prediction, arguing the lottery has a shining reputation and could be trusted to keep its games fair.

The New Jersey Lottery is a state commission, so its information about winners is public record and, currently, can be requested under the Open Public Records Act as soon as the person wins. Under Burzichelli’s bill, winners could decide how long to stay anonymous, keeping their identities secret for up to a year.

That temporary anonymity would give winners a chance to “take a deep breath and give some thought to what they want to do,” said Sen. Jim Whelan, D-Atlantic, who is sponsoring the bill in the Senate. “It would give them an opportunity to get their legs under them.”

Many of the companies that request information about winners look for people who are receiving their winnings as an annuity — a fixed set of payments spaced out over years. The companies offer to pay an immediate lump sum in exchange for the winner signing over the rest of the annuity.

One of those businesses is SenecaOne, a Maryland-based company that has made more records requests over the last four years — a total of 72 — than any other business. It files requests seeking winners’ names, hometowns and details about their prizes.

SenecaOne’s general counsel, Eric McCarthy, said lottery winners have a right to exchange the money they would get in the future for immediate cash, and SenecaOne can provide that service.

“SenecaOne and other purchasers of lottery winnings are in business because lottery winners sometimes choose to sell future payments to meet financial needs or fulfill their goals and aspirations,” McCarthy said in an email. He did not respond to questions about the company’s public records requests or the effect Burzichelli’s legislation might have on the business.

SenecaOne and its competitors can make money by keeping a portion of the winnings — the lump sum they pay out is lower than the total value of the annuity. But they do not publicly disclose the percentage of the money they keep.

New Jersey Lottery winners actually face a similar choice when they redeem their winning tickets: They can receive their money as an annuity stretched over time, or they can opt for one lump-sum payment of something less than the full prize money. For example, according to New Jersey Lottery’s Pick 6 website, a person who wins a jackpot of $11 million could choose a lump sum of $4.6 million or could receive the full $11 million divided into 30 annual payments.

Companies like SenecaOne look for people who originally chose the annuity but have since changed their minds.

Burzichelli and Whelan say the solicitations from financial services firms are just one reason lottery winners should be able to stay anonymous for a time. The bill was also inspired by some high-profile cases around the country in which lottery winners encountered misfortune.

In Florida, for example, Abraham Shakespeare was found dead four years after winning a $31 million jackpot in 2006. Dee-Dee Moore, who launched a business with Shakespeare after his win became public, was charged for his death.

No such crimes have been reported in New Jersey. But lottery winners still receive plenty of unwanted attention — and requests for cash — once news of their luck becomes public.

“We are all familiar with the stories of people who get sudden wealth … who wind up down the line broke in a relatively short period of time,” Whelan said. “If people want to squander their wealth, I guess they have that right. But this would at least give them an option of staying anonymous for a while so they can adjust to their wealth.”

But Luers, the open government advocate, said that the one-year anonymity would not prevent criminals or con artists from preying on winners; it might just delay them a bit. And people can lose their money whether they are anonymous or not, he said.

“If paying out winnings is so bad, stop paying them,” he said.

Burzichelli’s bill would make New Jersey the sixth state to grant its lottery winners anonymity. According to Powerball’s website, every state except Delaware, Kansas, Maryland, North Dakota and Ohio requires the lottery to release information about winners.

The bill was approved by an Assembly committee earlier this year and made it through a Senate committee in October. Burzichelli said he hopes it will receive a vote in the full Assembly early next month.